December 8 (SeeNews) - Moldova's government said that it approved the 2023 budget bill which envisages a cash budget deficit of around 6% of the gross domestic product (GDP) and 2% economic growth, with plans to rely heavily on external financing.
Budget deficit is projected at 18.3 billion lei ($937 million/892 million euro), which will be covered by both domestic and external sources, the government said in a press release on Wednesday.
Approximately 12.8 billion lei will be covered from external financing sources, while the rest will be provided for by domestic sources, according to the draft posted on the finance ministry's website.
Budget revenues next year are expected to come in at 64.9 billion lei, up 9.3% on the year, while expenditures are planned at 83.2 billion lei, up 12.5% compared to 2022.
The 2023 draft budget is built on estimates for a 15.4% annual inflation. Moldova's consumer prices rose by 27.95% year-on-year in October, compared to an increase of 33.97% in the previous month, latest data from the National Bureau of Statistics, BNS, indicated.
The draft budget is pending approval by parliament.
Moldova's economy contracted by an annual 0.6% in real adjusted terms in the second quarter of 2022 due to poor performance of the construction, manufacturing and real estate sectors, the statistical office said in September.
In October, the International Monetary Fund (IMF) said that Moldova's economy will increase by 2.3% in 2023. However, the IMF expects Moldova's GDP to stagnate in 2022, revising its April forecast for 2% growth.
In August, Moldova's government revised its 2022 economic forecast to zero from 0.3% to reflect the economic spill-over effects of the war on Ukraine and the strong rise in energy prices.
In 2021, Moldova's economy grew by 13.9% in real terms, following a 8.3% contraction in the previous year.
(1 euro= 20.5198 lei)